Lack of Personal Hearing / Ineffective Service of Notice - Madras
High Court Sets Aside GST Order
Brief
Summary:
In Sindhu Enterprises
vs. Appellate Authority & Others (W.P. No. 29598 of 2025), the Madras
High Court quashed a GST assessment order and the consequential rejection of
appeal on the grounds of ineffective service of notice and lack of
personal hearing. The Court emphasized that mere uploading of notices on
the GST portal does not constitute effective service when there is no taxpayer
response. The matter was remanded with specific directions, including partial
tax deposit and defreezing of bank accounts.
Case Title
and Details:
- Case Name:
Sindhu Enterprises vs. Appellate Authority & Others
- Writ Petition No.:
29598 of 2025 & W.M.P. Nos. 33159, 33161, 33162 of 2025
- Date of Order:
07.08.2025
- Court:
High Court of Judicature at Madras
- Presiding Judge:
Hon’ble Mr. Justice Krishnan Ramasamy
Background
and Facts:
- The 2nd respondent issued a show
cause notice dated 31.10.2022 by uploading it on the GST portal
without sending a physical copy.
- The petitioner was unaware of the
notice and failed to submit a reply.
- The 2nd respondent passed an ex-parte
assessment order on 30.06.2023, confirming the proposals in the SCN.
- The petitioner filed an appeal on
30.01.2024 with a delay of 121 days.
- The 1st respondent rejected the
appeal on 22.04.2025 solely on the ground of delay.
- The petitioner argued that the orders
violated principles of natural justice and requested defreezing of
bank accounts.
Submissions
Before the Court:
Petitioner’s Arguments:
- The notice was never physically
served; uploading on the portal alone was inadequate when there was no
response.
- No personal hearing was given
before passing the order.
- Willing to deposit an additional 15%
of the disputed tax (in addition to the already deposited 10%) if the
matter was remanded.
Respondent’s Stand:
- Accepted the petitioner’s willingness
to deposit 15% and left the matter to the Court’s discretion.
Findings of
the Court:
- Uploading on the GST portal is a
valid statutory mode of service under Section 169, but not effective
service when there is no taxpayer response.
- In such cases, officers must explore
alternate modes of service prescribed in Section 169(1), preferably RPAD.
- Passing ex-parte orders by fulfilling
only procedural formalities leads to avoidable litigation.
- The assessment order was passed without
affording a personal hearing.
Final
Judgment & Directions:
1. Set
aside the assessment order dated 30.06.2023 and the appeal
rejection order dated 22.04.2025.
2. Remand
the matter to the 2nd respondent for fresh consideration.
3. Petitioner
to deposit 15% of disputed tax within 2 weeks (in addition to earlier
10%).
4. Petitioner
to file a reply with documents within 2 weeks thereafter.
5. 2nd
respondent to issue 14 days’ clear notice for a personal hearing and
pass a reasoned order.
6. Upon
proof of 25% total deposit, the 4th respondent (Axis Bank) to defreeze
bank accounts immediately.
Key Legal
Takeaways:
- GST officers must ensure effective
service, not just statutory compliance.
- When there’s no taxpayer response, alternate
modes of service should be used.
- Personal hearing
is a non-negotiable requirement before confirming tax demands.
- Courts can link interim relief
(like bank defreezing) with partial tax payment.
Conclusion:
The Sindhu Enterprises
ruling reinforces that GST proceedings must go beyond procedural compliance to
ensure real opportunities of defense. By insisting on effective service
and personal hearings, the Court protected taxpayer rights while balancing the
revenue interest through conditional deposits.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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